Dunxin Financial (NYSEMKT:DXF) stock is rocketing higher on Tuesday, or at least it appears to be doing so.
However, the company’s shares aren’t actually undergoing such a massive rally. Instead, today’s movement is connected to an ADS ratio change. This is essentially a reverse stock split that boosts the price of shares without changing the company’s market capitalization.
This ratio change has the company altering its ADS from representing 48 shares of its common stock to 480 shares of its stock. That explains why the company’s shares are seeing such major gains this morning.
Why a DXF Stock Ratio Change
Dunxin doesn’t say why the company underwent an ADS ratio change, but its share price is probably the reason. The company’s stock was sitting well below $1 per share, which means it may have been in danger of being delisted.
As with any ADS ratio change or reverse stock split, Dunxin Financial says it can’t guarantee that its share price will remain up after today’s action. However, investors don’t seem to be reacting negatively to the change, with the stock up 20.2% on a post-split basis.
When it comes to trading activity this morning, around 240,000 shares of DXF stock have changed hands. That’s still a ways off from its daily average trading volume of about 4.3 million shares.
Investors seeking more of the most recent stock market news today are in luck!
We’ve got all of the latest stock market news that traders need to know about on Tuesday! Among that are the biggest pre-market stock movers this morning, the latest news concerning AMC (NYSE:AMC) stock, and more. All of that news is ready to go at the links below!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.